Incoming Taoiseach - The Tánaiste and Minister for Finance, Brian Cowen T.D

Irish Economy: William McChesney Martin (1906-1998), the chairman of the Federal Reserve for 19 years, spanning five Administrations, from that of Harry S. Truman to Richard M. Nixon, once said that the role of the Federal Reserve was''to take away the punch bowl just when the party gets going.''

The Celtic Tiger party is over and the challenge now is to deal with the hangover.

William Shakespeare wrote in Hamlet: When sorrows come, they come not single spies, but in battalions. However, while the short-term outlook maybe grim, just think of how bleak the scenario would be without a continuing National Development Plan, funded from the proceeds of the recent housing boom. Besides, it is well to keep in mind that last Thursday when the European Central Bank kept its benchmark rate on hold at 4% (in a decade's time, with higher global inflation, such a rate will be considered a dream!), another small open European economy - Iceland - increased its benchmark rate to 15.5%. I should also say that I'm an optimist myself as I'm an entrepreneur!

With over 28,000 job losses in the first quarter and big scale job losses looming in manufacturing businesses such as Iralco - 400 jobs; Waterford Glass - 500 jobs and maybe more than 1,000 at Dell Computer's operation in Limerick, responding to the end of the Celtic Tiger, will not be easy.

Incoming Taoiseach Brian Cowen as Finance Minister since 2004, was unwilling to sail against the wind and now with his Secretary General recently in receipt of a pay hike of 25% (as well as retired predecessors - what a pension scheme! You can live to be over 100 and anytime, the present incumbent of your last official position gets a rise, you do too) and Cowen himself in line for a deferred hike of 15% in 2009, he will have to persuade the public sector unions to accept pay restraint. In the private sector, there will be no need for ministerial jawboning.

IBEC, the employer's body, called for pay restraint earlier this week and said that the "only way to maintain jobs is by controlling costs, moderating pay growth to low single figures, maintaining labour market flexibility, embracing change, driving public sector reform, delivering productivity, improving R&D performance, effective capital investment in infrastructure, training/education and upskilling and adding value to what we produce."

In the social partnership process, IBEC played the lamb - so who will listen to it now?

There will not be any significant reform before the next general election and the OECD's report on public service reform will get some warm praise but the sacred cows will retain their protected status.

In fact, there is no constituency for parsimony when it comes to public funds. The socialists extend from farmers to pharmacists and many more.

In this golden age for agriculture, the farmers want continued welfare and no politician dare confront them.

The Chinese say that a fish rots from the head down and with economic headwinds moving closer last summer, Taoiseach Bertie Ahern extended the ministerial payroll to 35 in a country of 4.2 million - the Department of Enterprise, Trade and Employment has 4 ministers and the senior minister has the perk of making job announcements. There are 99 members of the Oireachtas receiving additional pay for officer positions in committees and still the buck stops nowhere.

Will Brian Cowen have the cojones to change all this? That's what is termed a rhetorical question!

As to proposals on where to go from here, I would say that the most important issue is to come down from the clouds and understand that blather about Ireland having the biggest software industry in the world and so on, may be self-soothing but we are only fooling ourselves.

When we look to Asia and do not understand the trade statistics while claiming that exports from the likes of Microsoft are from "Irish companies," what chance have we of understanding the challenges?

Ireland is as well known to most Asians as Bhutan is to most Irish.  - - Irish Economy: IBEC and understanding the world East of Suez

Recently, a bank economist said that the rise in Irish business service firms and the increase in service exports signals a transition from a construction dominant economy.

However, there is one serious problem with this argument. Most service exports are made by foreign-owned firms in Ireland and most Irish service firms do not export.

The latest mantra from short-term economists is that a decline in manufacturing is no bother as service exports are doing well.

A company with a payroll of none, for example Microsoft's two subsidiaries that operate from the offices of a Dublin law firm and are used to channel profits from the software giant's other overseas units, can have a multi-billion turnover.

The typical multinational manufacturer has many local SME's dependent on it.

Finally, it says a lot about Irish policymaking and the standard of the Opposition that more than €8 billion will be spent by 2013, on the goal to become a "world-class knowledge economy," but it remains unclear what epiphany moment in less than five years, will reveal this achievement,

Maybe a broadband service to rival the Nordic countries?

Micheál Martin, T.D, Minister for Enterprise Trade and Employment who is never short of a superlative for the most banal, was at it again yesterday with a "ground breaking" and "cutting edge" announcement on a new research centre.

In 2013, there will be thousands of researchers on the public payroll but with for example Ireland's two top tech companies, Iona and Trintech, recently reporting losses and UCC economists saying that"The massive public investment in research at third level may have a disappointingly limited effect on future Irish prosperity," isn't it time for a reality check on that and much more?

- - The Irish Mind and the Knowledge Economy: Should we bank everything on fuzzy leprechaunic political dreams?